On 25 May 2021 the OECD released a further batch of eight Stage Two peer review reports in relation to making dispute resolution mechanisms more effective under BEPS Action 14.

The minimum standard under BEPS action 14 is concerned with improving tax dispute resolution mechanisms. Countries that are members of the OECD’s Inclusive Framework on BEPS are committed to conforming to the minimum standard and are subject to peer reviews to review implementation of measures to achieve this.

Despite the significant disruption caused by the COVID-19 pandemic and the necessity to hold all meetings virtually, work has continued. The Stage Two peer review reports relate to Estonia, Greece, Hungary, Iceland, Romania, the Slovak Republic, Slovenia and Turkey.

The reports look at the progress made by these eight countries in implementing the recommendations made in their stage 1 peer reviews. The reports look at developments between 1 May 2018 and 31 October 2019 and they also take into account the mutual agreement procedure (MAP) statistics for the years 2016 to 2018.

The peer review reports note that there have been positive developments in all the eight countries. All the jurisdictions have signed the multilateral instrument (MLI) to implement tax treaty related measures on base erosion and profit shifting (BEPS) and three of the countries have already ratified the MLI. There are also bilateral tax treaty negotiations in progress or already completed. All the eight jurisdictions have updated their MAP guidance.

Of the eight countries reviewed, Hungary, the Slovak Republic, Slovenia and Turkey have put in place a documented bilateral notification and consultation process that would be applicable where an objection is considered by the relevant competent authority to be unjustified. In Estonia, Hungary, the Slovak Republic and Turkey the number of personnel in the competent authority function was increased; or the process of handling MAP cases was improved to ensure the procedure is carried out in a more timely and efficient manner.

Of the eight countries in the latest batch of peer reviews Estonia, Iceland, Romania, Slovenia and Turkey achieved an average time of 24 months to complete MAP cases. Greece slightly decreased the period of time required to close MAP cases. Greece and Slovenia have introduced legislation to ensure that MAP agreements can always be implemented regardless of domestic time limits. Estonia, Hungary and the Slovak Republic already had this legislation in place.

The next batch of stage 2 peer review reports on dispute resolution mechanisms will be released in a few months.